NEW DELHI: The real estate private equity arm of global investment firm Xander Group is close to acquiring a 35% stake in a unit of Indiabulls Real Estate for 1,000 crore, according to a person involved in the deal.

Indiabulls Infra Estate owns two land parcels in Mumbai's Worli area. It had bought 8.37 acre of land that used to house Bharat Mills for 1,580 crore and 2.39 acre of Poddar Mill's land for 474 crore in an e-auction of National Textile Corporation in 2010.

The term sheet for the deal has been signed and the deal is expected to close in the next two weeks, the person quoted above said. Spokesmen for both Indiabulls and Xander said they do not respond to market speculation.

Indiabulls recently launched a high-rise residential project called Blu on the combined 10.76-acre land parcel in central Mumbai, one of the largest plots to be developed in the area. Apartments in the project, spread over 1,480-2,940 square feet, are priced between 7 crore and 15 crore. Apartments in Worli range between 40,000 per sq ft and Rs 50,000 per sq ft.

An IL&FS real estate fund had picked up a 10% stake in the same company for 200 crore in January this year. The current transaction is being done at a 35% premium to the price at which the lands were bought in two years, said the person involved.

Private equity funds have slowed down their investments in the real estate space in the last one year. According to a report by property advisory firm Cushman & Wakefield, the sector saw investments worth 3,500 crore between January and September this year against 4,110 crore a year ago.

While investments in commercial real estate have fallen drastically, some funds are continuing to invest in residential projects because home sales in certain parts are still doing well. The report pointed out that maximum private equity investment happened in the residential segment in India in the first three quarters of 2012. Mumbai was the preferred market for private equity investments followed by Bangalore and the National Capital Region.